QUESTION 31

1. What is operating leverage?

   		A measure of how sensitive a company's profits are to changes in demand.
   		A measure of how much a debt a firm uses to finance investments.
   		The production environment in a company.
   		A measure of the breakeven point for a company.

QUESTION 32

1. Winslow Company collected the following data about its only product:

   Unit selling price	$36
   Unit variable expenses	$21
   Total fixed expenses	$51,000
   Actual sales for the month of March	7,000 units

   The margin of safety (in units) for the company during March was:

   		7,000
   		54,000
   		3,400
   		3,600

QUESTION 33

1. Determine the unit break-even point, assuming fixed costs are $80,000 per period, variable costs are $16.00 per unit, and the sales price is $24.00 per unit.

   		3,333
   		5,000
   		80,000
   		10,000